Bankrupt Solar Company Leaves Santa Barbara County Homeowners with Liens

Electriq Power’s Installer Just Wants to Be Paid

By Jean Yamamura Tue Jul 02, 2024 | 11:47am

The bankruptcy of a solar-power company in South Florida is creating an array of problems on the South Coast. The business — Electriq Power Inc. — was putting solar panels and batteries on Santa Barbara rooftops at no expense to homeowners and with the blessings of the cities of Santa Barbara, Goleta, and Carpinteria. But then Electriq filed Chapter 7 on May 3, freezing all its operations.

This prompted one of its subcontractors, Axiom 360 of Grover Beach, to place mechanics liens on homes for which it had yet to be paid. This preserves Axiom’s options for full payment of its installation work and is not unusual among contractors. But for homeowners who didn’t expect any financial outlay, it came as a shock, especially as the recording notice lists foreclosure in 90 days among the penalties.

“You’re helping the environment. You’re not paying high rates to Southern California Edison,” said homeowner Randy Freed, explaining why he signed on to Electriq’s PoweredUp Goleta program. He was pleased with the savings in the solar array and storage batteries, but then he received the mechanics lien in June. The possibility of foreclosure was unanticipated, Freed said, and he’d relied on the cities’ endorsements. “It’s a great program; we’ve checked them out,” he recalled the cities saying on a postcard he received.

Goleta spokesperson Kelly Hoover said they’d only recently received notice of the bankruptcy. So far, they’d heard from two residents, she said, and had provided them with the bankruptcy trustee’s information. “The city is in the process of evaluating its impact as the federal bankruptcy case moves forward,” Hoover said. The City of Carpinteria had planned to participate in the program but hadn’t yet held any meetings. The County of Santa Barbara was approached but said no — “We couldn’t favor one company over others,” said April Price, with the sustainability division.

The bankruptcy trustee, attorney Robert Furr of Boca Raton, will hold an auction on July 8 of $18 million in inventory held in a warehouse in San Leandro, California, Electriq’s original base of operations. But Electriq owes about $70 million to its creditors, including $100,000 to Axiom, according to the bankruptcy filings. Furr said he hoped to recoup at least $5 million in the auction and that other assets were out there, though he’d have to sue for them.

Electriq’s bankruptcy could be due to bad timing. The company went public in August 2023, four months after California’s NEM 3.0 went into effect, slashing the home-solar rate by about 75 percent, CalMatters reported. Solar installations dropped 80 percent. Despite $10 million in commitments in Puerto Rico and new community networks reported by Electriq in late 2023, its IPO of $400 million was in ruins by December — the New York Stock Exchange warned the company had to bring its stock price above $1 and its average market capitalization above $50 million; it was delisted in January 2024.

The cities viewed the promotion as one that would benefit low- and middle-income homeowners, who have been gradually increasing their adoption of the $30,000-$40,000 systems, according to CalMatters.

The solar panels on Randy Freed’s roof are up and running, but Electriq Power Inc.’s bankruptcy has delayed the solar rate he is due. | Credit: Courtesy

“Electriq designed this program specifically to be accessible by low- and middle-income customers who might not be able to afford the steep upfront costs of these systems and/or did not have good credit,” said Alelia Parenteau, director of the City of Santa Barbara’s Clean Energy program. “As electrical costs continue to increase statewide, it is important, now, more than ever, to provide our residents some ability to control those costs,” she added. “Battery and solar systems are the best way to do that.”

If the arrangement sounds too good to be true, it actually isn’t. The financier of the equipment, another Florida company called EverBright, charges the homeowner for the electricity produced, but at the home-solar rate, which is lower than what the local utilities charge — exactly as homeowner-financed solar works. EverBright is a subsidiary of NextEra Energy, formerly known as Florida Power & Light, the third largest electricity revenue producer in the U.S.

Freed is now working with EverBright to get the solar rate on his meter readings, which were to be handled by Electriq. “The city was very helpful,” Freed said, “but I had to do a lot of research myself. They should be reaching out to us.”

Since late 2022, Electriq had installed roughly 75 systems across the county; about five of them were mid-install at the time of the bankruptcy, Parenteau said. In all, about 24 mechanics liens were placed by Axiom of $5,000-$12,000.

Asked for comment, Axiom CEO Brandon Hoffman emailed that he hoped “with the help of the impacted homeowners, bankruptcy court, the consumer financing company, and Santa Barbara housing” that all would be resolved. “Electriq has left quite a bit of damage in their wake,” he said.